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That's a good thing, Scotiabank's Adrienne Warren said in a new report today, citing the slowing in home prices over the past six months because of high prices, mortgage restrictions and fewer jobs being created.

"We expect sales and prices will be relatively flat in the year ahead," Ms. Warren said in her report.

"Even with interest rates forecast to remain low well into next year, public sector restraint and a lack of pent-up demand will temper both first-time and move-up buyer activity. Regionally, relatively stronger job and income gains and more positive demographic trends favour Western Canadian housing markets over those in Central and Eastern Canada."

This is an "important step" in rebalancing market valuations, she added, as, for example, income catches up to prices.

Ms. Warren also still sees no meltdown on the horizon.

She tracked global trends to find that markets have come under "increasing stress," but Canada still ranks well.

"Pricing conditions in the majority of markets in our survey deteriorated in the final quarter of 2011," she said. "Sovereign debt concerns, high unemployment, weak consumer confidence and, in some cases, excess supply and tight credit, continue to stifle demand and depress prices."

Building permits slip Construction plans in Canada slipped in January, largely on a pullback from condo developers in Ontario, but these numbers are notoriously volatile and it's just a one-month reading.

The value of building permits issued in January in Canada fell 12.3 per cent to $6-billion, Statistics Canada said today. That followed a hefty gain of more than 10 per cent in December.

Where residential construction is concerned, permits fell 6.6 per cent, after three months of gains, and largely related to multifamily units, such as condominiums, in Ontario.

Over all in Canada, permits for such developments sank 12.4 per cent in January, after surging almost 31 per cent in December.

Ontario led the drop, followed by Alberta, while gains were led by British Columbia and Quebec.

"However, even with January’s loss, the level of overall residential permits remains above levels seen in 2011, suggesting that the low-rate environment continues to support home-building," CIBC World Markets economist Emanuella Enenajor said of the overall showing.

Market jitters ease Global markets are calmer today after yesterday's rout, but it could be the briefest of respites.

Investors fled stocks yesterday on concerns over the economic outlook and the looming deadline for a crucial bond swap in Greece. The deadline for bondholders to agree to that exchange is tomorrow, so it's a fairly safe bet that at least some volatility in financial markets will pick up again.

"It appears that even now there are some optimists to be found in global markets, as the bulls poke their heads nervously above the parapet," said sales trader Ben Critchley of IG Index.

"However, the issues that prompted yesterday’s selloff remain unresolved, most notably the Greek debt swap, which has yet to be completed. The deadline for this is Thursday, which provides a degree of scope for further jitters until the actual result is known."

As The Globe and Mail's Eric Reguly writes in today's Report on Business, several institutions that hold the bonds, part of a creditor steering committee, have agreed to sign on to the so-called private sector involvement, or PSI, that's part of Greece's grand plan to ease its debt crisis.

But it's far from clear whether Athens will get the number it wants, and further, whether it will trigger what are known as collective action clauses, or CACs, that retroactively change the terms of its debt. Also unknown is whether such a move would be deemed a default that would in turn trigger insurance payouts.

All of this comes in the run-up to a March 20 bond redemption. And Greece's finance minister is playing hardball.

"Following on from Monday’s announcement that the 12 members of the IMF Greece creditor’s steering committee, including BNP Paribas and Deutsche Bank, would be participating in the Greece debt swap, all the remaining Greek banks followed suit," said senior market analyst Michael Hewson of CMC Markets.

"In a surprise development at least four Greek pension funds have refused to take part in the bond swap, after coming under pressure from workers unions, worried about the effect on the viability of their funds. They obviously didn’t get the memo from Finance Minister Venizelos about holdouts not getting paid out in full, and CAC’s being triggered whether investors agreed or not."

These developments played into yesterday's market angst, though there's a more optimistic mood today.

Stocks in Japan and Hong Kong slipped, but climbed in Europe and New York, though Toronto's market was soft.

"Various institutions have been publicly announcing their intention to take part in the Greek PSI swap (overnight it was Allianz, Unicredit and Generali) and rumours of deadlines being extended are all but dead," said currency strategist Elsa Lignos of RBC in London.

"So some of the more negative perceptions have been priced out overnight but we think risk appetite will struggle to break higher. There is little incentive to leak any good news about PSI participation ahead of time as it reduces the incentives for others to sign up, so if anything the risks on leaks are skewed to the downside."

(Germany's outspoken Finance Minister Wolfgang Schauble went to visit the pope today, along with what the Vatican Information Service called his "entourage." Well, a little prayer couldn't hurt.)

Whither the markets Yesterday's downdraft on the markets ended, at least temporarily, a rally that had generally been running since mid-December, fuelled by central bank action and brighter economic readings.

Where do things stand now?

"The best clues are likely to come from volatility across asset classes," said senior currency strategist Camilla Sutton of Scotia Capital.

"One of the most important themes in 2012, has been the collapse in volatility as G4 central banks have removed tail risk through aggressive and alternative policy," she said in a research note today.

"The second is the outlook for global growth, which improved materially in the first months of 2012. The combination of these two drivers spurred a significant risk rally in the first two months of 2012. The easiest way to follow the market’s pricing of these two themes is likely through volatility and copper (with the latter being a good proxy for global growth). Shifts in either of these are likely to be the clues that the environment is changing and a more material end to the risk rally is upon us."

Scotiabank acquires U.S. firm Canada's Bank of Nova Scotia has struck a deal to acquire Howard Weil Inc., a U.S. investment boutique with a sole focus on energy.

Scotiabank didn't say how much it's paying. The combined group will now have research coverage on more than 220 energy companies. The bank already has a strong energy investment banking business through its Scotia Waterous division, The Globe and Mail's Tim Kiladze writes.

Howard Weil is based in New Orleans and Houston, and dates back to 1946.

“Our overall equities strategy continues to focus on global growth initiatives where we have deep sector expertise or can leverage Scotiabank’s organizational and geographic presence,” managing director Patrick Burke said in a statement.

Strike threatened at Air Canada The biggest union at Air Canada is threatening to strike just as many Canadian kids head off for what's known as March Break.

The International Association of Machinists and Aerospace Workers, which represents mechanics, baggage handlers, cargo agents and other at Canada's largest carrier, set a deadline of just past midnight next Monday, The Globe and Mail's Brent Jang reports.

Air Canada said it would "endeavour to minimize inconvenience to its customers" if a labour deal isn't reached in time.

Today it added retired U.S. Navy Admiral Eric Olson, whose nickname is Bullfrog from his SEAL days, to the international advisory board of its GardaWorld subsidiary.

The board already boasts the likes of the former Permanent Secretary of Britain's Civil Service and Intelligence, Security and Resilience Cabinet Office, and the former Deputy Secretary of the U.S. Department of Homeland Security.

Here's how Garda described its newest recruit: "Admiral Olson led the United States Special Operations Command for four years prior to his retirement from active service in September 2011. The first Navy SEAL to be promoted to three-star (2003) and four-star rank (2007), Admiral Olson’s career was one of both personal valour and visionary leadership. He is credited as the officer most responsible for developing the special operations capabilities that have been so prominently displayed in several of the most notable operations of recent years, including the capture of Saddam Hussein and the death of Osama bin Laden."

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